U.S. Equity Markets resumed their march higher, finishing the day higher led by the NASDAQ which closed with a gain of 0.59% while the Small Cap Russell 2000 surged 2%. Once again, the Federal Reserve drew headlines. Federal Reserve Vice Chairman Richard Clarida reiterated inflation pressures are transitory, but said the central bank could begin discussing the withdrawal of bond purchases at upcoming meetings. There was also some focus on infrastructure. The Republican $1 trillion counterproposal could come as soon as tomorrow, as negotiations continue. There was also a noteworthy Treasury auction, offering up five-year Treasury notes. The yield for the auction came in below the yield that Treasuries had traded at prior to the auction. This is a signal that institutional investors are less worried about interest rates, otherwise they would have tried to force interest rates higher. European Markets declined. European Central Bank Governing Council member Francois Villeroy de Galhau said any suggestion of removing monetary policy support in the third quarter is “purely speculative.” French Consumer Confidence data for May were in line with expectations, rising versus April, signalling the outlook in Europe’s second-largest economy is improving. ECB Governing Council member Fabio Panetta said it is too early to consider tapering asset purchases, adding that withdrawing too soon would hurt the recovery. In Asia, The People’s Bank of China set a stronger yuan reference rate, easing concerns it may tighten monetary policy to offset rising raw material costs. Bank of Japan Board Member Hitoshi Suzuki said it should refrain from exchange-traded fund purchases during periods of market calm to keep from swelling the balance sheet. South Korea’s Prime Minister Kim Boo-kyum said individuals with at least one COVID-19 shot will no longer need to wear masks outdoors starting in July. Elsewhere, Bitcoin rose 3%, bouncing back from Tuesday’s sell-off, while Gold fell 0.2% on Dollar strength.
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For anyone following my Platinum Service it made 30 points yesterday and is now ahead by 1235 points for May having closed April with a gain of 1244 points, having ended March with an impressive gain of 3769 points, having made 3286 points in February, 2077 points in January, 2273 points in December, 2025 points in November, 2779 points in October, 3042 points in September and 2383 points in August. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1600 points
The S&P 500 closed 0.19% higher at a price of 4195.
The Dow Jones Industrial Average closed 10 points higher for a 0.03% gain at a price of 34,323.
The NASDAQ 100 closed 0.33% higher at a price of 13,702.
The Stoxx Europe 600 Index closed 0.4% lower.
Yesterday, the MSCI Asia Pacific Index rose 0.1%.
Yesterday, the Nikkei closed 0.31% higher at a price of 28,642.
The Bloomberg Dollar Spot Index closed 0.3% higher.
The Euro closed 0.3% lower at $1.2189.
The British Pound closed 0.3% lower at 1.4114.
The Japanese Yen fell 0.3%, closing at $109.12.
Germany’s 10-year yield closed four basis points lower at -0.21%.
Britain’s 10-year yield closed four basis points lower at 0.74%.
US 10 Year Treasury closed one basis points higher at 1.57%.
West Texas Intermediate crude closed 0.14% higher at $66.07 a barrel.
Gold closed 0.20% lower at $1,893.20 an ounce.
This morning on the Economic Front we have no data again of note from either the UK or the Euro-Zone. At 1.30 pm we have the latest U.S Weekly Jobless Claims, GDP and Durable Goods Orders. At 3.00 pm we have Pending Home Sales, Finally, we have the Kansas City Fed Manufacturing Index at 3.30 pm and a speech from Treasury Secretary Yellen at 4.00 pm.
June S&P 500
One of the quietest trading sessions of the year to-date with little or no movement across all asset classes including stocks. Markets continue to bounce off any sell-off as the ongoing theme of new highs every month since last November continues. Even though the S&P fell 5% last week, the market has bounced and is now within 1% of all-time highs. Even the VIX fell 8% yesterday to close near year to-date lows at 1760. I still do not trust this market as it reminds me of similar price action ahead of the February 2020 top and the October 2018 top that led to a 20% fall, two months later. The S&P has an ‘’Open Gap’’ from May 12 at 4153 and I would expect any test of this level to be met by strong buying ahead of the seasonally strong Memorial Weekend. Today, I will raise my buy level to 4152/4167 with the same 4139 ‘’Closing Stop’’. I will continue to be a small seller from 4215/4230 with a 4241 ‘’Closing Stop’’. If I am taken long I will have a T/P level at 4179. If I am taken short I will have a T/P level at 4205.
I am still flat the Euro which closed 0.3% lower after rejecting yesterday’s 1.2260 high print. I am still flat and I will now lower my buy level to 1.2110/1.2150 with a lower 1.2055 stop. I will also lower my sell level to 1.2270/1.2320 with a lower 1.2355 tight stop. If I am taken long I will have a T/P level at 1.2185. If I am taken short I will have a T/P level at 1.2240.
June Dollar Index
My latest 89.75 long Dollar position worked well with the market rallying to my 90.05 T/P level and I am still flat. Today, I will again be a buyer from 89.30/89.70 with an 89.85 stop. I still do not want to be short the Dollar at this time. If I am taken long I will have a T/P level again at 90.05.
After a relentless move higher over the past week, we finally saw some weakness in yesterday’s session. I am still flat and as I do not trust this market I will now lower my buy level slightly to 15210/15280 while leaving my 15145 stop unchanged. If I am taken long I will have a T/P level at 15325.
The boring sideways action in the FTSE continues and I am still flat. I will continue to be a buyer from 6900/6950 with the same 6845 stop. I will now lower my sell level to 7075/7125 with a 7165 stop. If I am taken long I will have a T/P level at 6980. If I am taken short I will have a T/P level at 7040.
Dow Rolling Contract
I am still flat the Dow which again missed my buy level before having a small rally. I will leave my 34030/34190 buy level unchanged with the same 33895 ‘’Closing Stop’’. I will now lower my sell level to 34530/34700 while leaving my stop unchanged at a Closing Price of 34825. If I am taken long I will have a T/P level at 34310. If I am taken short I will have a T/P level at 34430.
I am still short the NASDAQ and caught wrong from earlier in the week at a price of 13575. I will now raise my T/P level to 13560 while leaving my 13705 ‘’Closing Stop’’ unchanged.
The Bund rallied from the off, yesterday morning and I am still flat. The Bund has good support from 169.40/169.80 and I will now raise my buy level to this area with a higher 168.95 stop. If I am taken long I will have a T/P level at 170.15.
Gold Rolling Contract
No Change. I am still flat and I will leave my 1840/1855 buy level unchanged with the same 1829 stop. If I am taken long I will have a T/P level at 1863.
Silver Rolling Contract
I am still flat. Today, I will now lower my buy level to 26.60/27.20 with a lower 26.15 stop. If I am taken long I will have a T/P level at 27.55.
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